Parliament has recently passed a Bill which doubles employee’s minimum sick leave from 5 to 10 days per annum.

The Holidays (Increasing Sick Leave) Amendment Bill was introduced on 1 December 2020 and has rapidly passed through all three readings to receive Royal Assent on 24 May 2021.

The main purpose of the Bill was to increase the availability of employer-funded sick leave for employees and to better enable New Zealand employees to access sick leave. The Bill also provides better support for employees to stay home when they are sick and to ensure the sick leave provisions are clear and simple to understand for both employers and employees.

Under the current Holidays Act 2003, all employees are entitled to five days paid sick leave each year. Sick leave can be used if an employee is unwell or injured, or if their spouse, partner, dependent child or other person who depends on them is sick or injured. Employees are eligible for sick leave if:

  • they have 6 months of current continuous employment with the same employer, or
  • they have worked for the employer for six months for an average of 10 hours per week, and at least one hour in every week, or 40 hours in every month.

Under the new legislation new employees, or employees who have worked less than 6 months, would become entitled to 10 days paid sick leave after 6 months of continuous employment and a further 10 days paid sick leave for each subsequent 12-month period. For existing employees, who have already worked for at least six months, would become entitled to 10 days paid sick leave when they next become entitled to sick leave for a 12-month period (i.e the anniversary of the first time they completed 6 months).

Despite the increased entitlement to sick leave, the maximum days of unused leave that can be accumulated remains at 20 days in any 12-month period. The number of unused sick leave days that may be carried over to the next 12-month period, is decreased from 15 to 10 days of sick leave. This is merely the statutory minimum; an employer may still offer further entitlements over and above this on a contractual or discretionary basis.

The new legislation is expected to come into effect around mid-July 2021.

Further changes to Sick Leave entitlements in early 2022

The Government are currently implementing numerous recommendations of the Holidays Act Taskforce (a Taskforce that was established to suggest improvements to the Holidays Act 2003, and which 22 of their recommendations have been accepted by Government) , which includes giving employees access to one day sick leave from the first day of employment, with and additional day given per month until the minimum entitlement is reached, as opposed to only being entitled to sick leave after the 6-month period.

The Government has proposed that the Taskforce’s further recommendations are expected to be introduced in early 2022, which will then go through the full parliamentary process. This process should allow employers sufficient time to familiarize themselves with the changes, and implement and update their practices, polices and contracts as required.

Sarona Chambers

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